Air Atlanta Turning Out Of The Head Winds Carrier Finding Success In Florida Destinations

July 7, 1986|By Peter Adams of The Sentinel Staff

Air Atlanta, the privately held airline that has been losing an average of $500,000 a month for most of its 30-month existence, is starting to show signs of recovery.

A combination of factors -- including its service to Orlando, which started in January -- is contributing to the airline's recovery by helping it reduce its losses.

Air Atlanta's vice president of communications and industry affairs, Daniel Kolber, said Orlando, with three flights a day, has become the airline's third-most-important market, behind Miami and its Atlanta hub. When Air Atlanta inaugurated service Feb. 1, 1984, it flew to New York, Miami and Memphis from its Atlanta base.

Florida has been good to Air Atlanta. Along with Orlando, the airline also started service to Tampa in January. It added service to Fort Myers July 1. Kolber said the airline plans to add a fourth daily flight from Orlando International Airport by September, and another in 1987.

Carolyn Fennell, spokeswoman for Orlando International Airport, said about 15,000 passengers have flown Air Atlanta from Orlando since it started service here. ''It still has a small market share (about .6 percent),'' Fennell said. ''But it is an airline that we are watching. There is a lot of potential there.''

The airline is considering a public stock offering, another factor that could improve its financial position. Kolber said an offering could be made by the end of the year, and the airline could raise, at $10 a share, as much as $25 million, Kolber said.

That cash could be used to add to Air Atlanta's fleet of six leased aircraft. Some of those additional seats could be used for Orlando service, as Air Atlanta continues its pitch for the Sunbelt business traveler, Kolber said.

''We're going after the business traveler who wants quality service. Serving the no-frills traveler, the backpacker, is difficult because they're seasonal. They're mostly college students who travel around the holidays,'' Kolber said.

Financial analysts who follow the airline industry said they know little about the privately held carriers, such as Air Atlanta. Edith Twomey, an analyst for the brokerage firm of Robinson Humphrey & Co., in Atlanta, said, ''There have been rumors that Air Atlanta has been in trouble, but they have had help from the Atlanta business community who want to see that airline succeed.''

The company's 32-year-old chairman, Michael R. Hollis -- the only black airline chief executive in the United States -- raised $50 million from private sources in the first year and a half of operation.

So far this year, the company lost $1.4 million on revenue of $24 million, according to figures supplied by Air Atlanta. But Kolber said the past two months have shown an operating profit, mostly because of the Orlando and Tampa service.

Lee Howard, vice president of Airline Economics Inc., a Washington trade group, said Air Atlanta has tried to zero in on a market, targeting cities and schedules that wouldn't have been possible without deregulation of the airline industry.

Howard also said the airline introduced an unlimited travel pass between its route cities, including Orlando. The cost of the pass, for use through Jan. 1, is $1,286.

''It's a new way of marketing the product -- another result of deregulation,'' Howard said.